Warren shames both parties on college affordability

Progressive hero Elizabeth Warren, who has been thwarted for more than a year in her college affordability push, cast blame Wednesday far and wide as she attempted to shame her colleagues and schools into taking real action to relieve the student debt problem in America.

The renewed push comes almost exactly a year after the freshman senator first flexed her muscle on the issue. While she failed to even get the votes necessary to advance her legislation allowing borrowers to refinance their federal and private student loans, she succeeded in pushing the debate on student loans to the left.

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Now, Warren has even more firepower.

College affordability has become an issue on the 2016 presidential campaign trail for both Democrats and Republicans. Hillary Clinton has promised to deliver a proposal on student debt. Former Maryland Gov. Martin O’Malley recently told supporters nationwide that “every student should be able to go to college debt-free.” Independent Sen. Bernie Sanders has proposed legislation that would make tuition free at public colleges.

On the Republican side, Sen. Marco Rubio can point to past proposals for reforming the student loan system. Sen. Lindsey Graham has said he’s on board with allowing borrowers to refinance student loans at lower interest rates. Former Texas Gov. Rick Perry, in his announcement speech, also pledged to do “something” about mounting student loan debt.

Capitalizing on that fervor, Warren on Wednesday issued a sharp rebuke to snap her colleagues into action.

“It starts with courage — the courage of both Democrats and Republicans to admit how much is wrong and that the other side has a real point,” the Massachusetts Democrat said in a speech at the headquarters of the American Federation of Teachers. “We can do it if Republicans admit that we will never have affordable college without investing more resources in education, and if Democrats admit that we will never have affordable college without demanding real accountability in exchange for those investments.”

Warren also pointed, aggressively, at colleges and universities for exacerbating the nation’s student debt problem, which is about $1.2 trillion and climbing.

She has struck a similar tone at Senate education committee hearings of late, grilling college presidents who want Congress to ease regulations or increase federal aid, but won’t commit to lowering tuition in return.

“Resources matter — but so do incentives,” Warren said.

The push dovetails with Warren’s other causes: her war on Wall Street and big banks and her work as a consumer financial watchdog. And she hasn’t been dormant on the issue since her specific legislative push failed last year. Warren and Sens. Brian Schatz (D-Hawaii) and Chuck Schumer (D-N.Y.) introduced a resolution supporting a debt-free concept in their chamber. The Senate and House resolutions have a combined 71 co-sponsors. But there’s no legislation attached to the resolve.

Warren on Wednesday went beyond the resolution, laying out a variety of policy options, including her student loan refinancing bill, legislation that would require colleges to reimburse some portion of defaulted student loans, and requiring states to maintain minimum investments in institutions.

“While not every college needs to graduate every student debt-free,” Warren said Wednesday, “every kid needs a debt-free option.”

But some experts questioned how much can be accomplished before the next presidential election, especially if President Barack Obama does not more heavily promote his own proposal. Obama earlier this year called for providing two years of free community college, a nonstarter with the Republican-led Congress, though his idea was inspired by a proposal from Tennessee’s Republican Gov. Bill Haslam.

Warren’s comments are a clear indicator that Democrats plan to keep pushing college affordability in Congress and in the presidential race — an issue that Clinton’s campaign manager recently called “what voters are looking for.”

“The question is whether a president is going to carry this forward,” Sara Goldrick-Rab, an educational policy studies and sociology professor at the University of Wisconsin at Madison, told POLITICO after speaking on a panel following Warren’s speech.

“Warren has been very successful changing the conversation on the left around things like refinancing, so a broader and clearly defined set of other proposals is interesting,” said Ben Miller, senior director for post-secondary education at the Center for American Progress.

In addition to hitting states for divesting in higher education, Warren dinged Congress for letting resources taper off while the feds profit off student debt and the Education Department for lax enforcement with troublesome loan servicers and for-profit colleges.

Although Warren came down hard on the Education Department — nothing new for the seasoned critic of the agency’s contracts and oversight — much of it will likely ring true. Just this week, Ted Mitchell, the top higher education official at the department, noted the risk of states supplanting their own funds with federal dollars through initiatives designed to increase college access and completion.

And Warren’s remarks came just days after the department offered a long-awaited plan to help thousands of students at shuttered for-profit college giant Corinthian Colleges deal with millions in student loan debt. More than a dozen congressional Democrats pushed the agency to forgive the debt of those students and others whose colleges may have committed fraud. (The department found that Corinthian falsified job placement rates, and the now-bankrupt company is also under investigation by several federal agencies and state attorneys general.)

But taxpayers will be stuck with the bill, to the tune of anywhere from more than $500 million, in the case of Corinthian students whom the department has already deemed eligible for loan forgiveness, to more than $3.5 billion, the total loan portfolio of students who attended one of the college’s campuses in the past five years.

Warren delivered the speech as work is heating up on reauthorization of the Higher Education Act, the massive bill governing federal financial aid and other college regulations.

Warren touted her student loan refinancing legislation, which the Senate has blocked twice. Republicans have staunchly opposed lowering interest rates for existing borrowers, though Warren notes some states — like North Dakota, under Republican Gov. Jack Dalrymple — have done so on their own.

And she endorsed some policies that are being considered in a process that Senate education committee Chairman Lamar Alexander insists will be bipartisan.

For example, Warren plugged her legislation that would require colleges to reimburse some portion of defaulted student loans, in theory encouraging institutions to “pay attention to rising costs and failing students.” Such risk-sharing concepts have gained traction from congressional Republicans, too.

The federal government should simplify the application process for federal student aid, she said — as Alexander and other members from both parties have said. Even the White House is on board with that one.

Other ideas are less likely to find broad support.

Warren floated a maintenance of effort rule for states, requiring them to maintain minimum investments in schools. That idea emerged at a reauthorization hearing last week — but Alexander shot it down, fast.

Some research has argued that student loan debt is dragging down the economy, preventing borrowers from starting businesses and buying homes, cars and the like.

But that notion has its critics. At a hearing last week, for instance, Alexander asked why nobody’s panicking about the comparable cumulative level of car loan debt.

“I think the question,” Miller said, “is does finding some common ground on risk sharing — an idea the Senate education committee seems very interested in — free up room for agreement on other issues?”

Jobs With Justice project coordinator Beth Huang isn’t holding out hope for drastic federal action, she told POLITICO after speaking on a panel Wednesday following Warren’s speech. More likely, she’s hoping, different states will pick up these proposals and run with them.

“I agree with the senator, especially when she says, ‘Let’s put the politics aside and work across the aisle,’” Goldrick-Rab said on the panel. “But research suggests we need to prioritize several things.”

Namely, Goldrick-Rab said, colleges need to get students through to the finish line — ideally through a free two-year college option. And simplicity and transparency in the federal financial aid system is critical, she added.

“I really hope people don’t harbor the idea that if we don’t get it done this Congress, it’s not worth working on,” Goldrick-Rab said. “I think we will find some colleagues on the other side of the aisle who do understand that this is not a tenable situation, and we’ve got to find those allies soon.”